Southwest Airlines is very happy with the current fleet make-up. The carrier does not want a new type added into the operation. CEO Gary Kelly was pretty clear on that front during the most recent earnings call late last month, “We think that Boeing is a very strong company, a great partner and believe that the MAX 8 is the best airplane in its category. We haven’t learned anything different in 90 days to change our view on that.”
Still, as the company continues CBA negotiations with its cabin crew there’s a hint that someone, somewhere is thinking about how to make that change.
Adding a new type to the fleet is a constant topic of conversation swirling around the carrier. A trip to Europe by a group of executives to learn more about the A220 earlier this year was described as “unfortunate timing,” coming on the heels of the 737 MAX grounding. That grounding has hamstrung the company’s growth plans for 2019 and will have residual impact into 2020. But is it really something that will happen soon?
In a recent messaging to its members the union outlined a number of key points in the current proposals being negotiated. A 3% annual raise over three years, or a $2,000 signing bonus plus 2.5% raise was a key item. Buried lower down on the page, however, is mention of the “Ability to fly more narrow-body aircraft Types.”
Currently the contract covers the operation of the Boeing 737-200/300/500/600/700/800/MAX7/MAX-8 and 717. Adding a new type to that list requires reopening the basic Agreement, a significant step and something that makes such a move harder for the company. Including the necessary details in the agreement as part of the renegotiation would significantly ease the process of adding a new type to the fleet.
And even as the company insists that plans to add a new type are not currently underway, it does confirm the underlying rationale for expanding the scope of the contract:
In many collective bargaining agreement negotiations, Southwest proposes changes for consideration that can enhance future efficiency and operational performance, if ever needed. Southwest has no current plans to pursue or introduce a new fleet type.
Such a change would be far from trivial. As Kelly noted in the earnings call, it is anything but a short-term decision:
[R]ight now, we don’t see that we need a change in strategy. The longer answer is, I think, it’s something that needs to be fully explored and debated and that’s not something we’re going to do in 90 days. As a practical matter, if we want to diversify the fleet, it would take us years. So absent going out and acquiring another carrier and operating a separate airline in that sense, there’s just no easy way around that.
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717 has always been in there since the Air Train acquisition. Duh. Same contract.
I know. That’s not the additional type being negotiated about. The company is looking to add new types. I just listed the old ones to point out that anything other than those requires the full agreement to be reopened and that’s not nearly as easy as “fixing” it now while they’re negotiating everything else anyways. It gives the company a little more wiggle room.
I could see how a switch to all A220 fleet would make sense for SW, but financially and technically it’s likely too difficult. If there were any upstart airline though, it could make a lot of sense.
Switching to an all-A220 fleet would be a horrible choice for Southwest. The reduced capacity relative to the current 737-800/737-8 plans would not be good for business.
Whether a smaller “regional feeder” plane makes sense could also be debated, especially considering that the carrier does not operate a traditional hub-and-spoke model so much.
I often thought WN would need an aircraft to service smaller cities such as the E190 and E195. Anything larger would blur the difference between the E190 and the 737-700.
Smaller planes for smaller cities/routes makes some sense. But total trip cost (i.e. operating cost of the plane) also comes into play. There are times where the different is not significant enough to justify the reduced capacity.
It would also require Southwest to become a bit more hub-and-spoke than it currently operates as. That could bring interesting stress to the network in certain areas.